Do I have to pay my private student loans while I’m still in school?


December 21, 2020

Note that the student loan situation has changed due to the impact of the coronavirus outbreak and the relief efforts of the government, student loan lenders and others. Check out our Student Loans Hero Coronavirus Information Center for news and additional details.

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Do you have to pay student loans while you study? In most cases, the answer is no. Federal student loans, as well as most private student loans, have a grace period, which means payments are deferred until you graduate.

However, private student loans earn interest while you are in school, so it might be a good idea to make interest payments only while you are still a student. To help you decide, let’s answer the following questions:

Do you have to pay student loans while studying?

Fortunately, most lenders understand that students cannot pay off the full student loan while they are in school. This is why most lenders defer student loan payments while you’re enrolled in school and, in most cases, for an additional six months after you graduate.

But each private lender sets their own rules, so it’s important to read your loan documents carefully before signing them. A lender may expect immediate repayment, especially if you’ve borrowed a parent loan, so you need to make sure you understand exactly when the repayment begins.

If you have federal student loans, you don’t have to pay them off while you study either. Your monthly payments will start six months after you graduate or fall below half-time enrollment.

A grace period gives you some time to get back on your feet and find a job. You should use the time to your advantage by saving aggressively while you are not making monthly payments. Try to set aside a few hundred dollars each month for your student loan payments and don’t let lifestyle inflation set in.

Do private student loans bear interest while studying?

Even if the answer to “Do you have to pay student loans while you are studying?” Is usually no, it doesn’t mean you have to wait to make the payments. Private student loans earn interest while you are in school, which means your loan balance will continue to increase.

Federal unsubsidized student loans also bear interest from the date of disbursement. The only loans that are exempt from accrued interest are federal subsidized loans, which are given to students in financial need.

To understand how much interest will accrue on your student loans, use our student loan payment calculator.

Is making payments at school on your student loans worth it?

While most student loans don’t require payments while you’re in school, that doesn’t mean you shouldn’t get started. pay them off sooner if you can afford it.

Interest is one of the main reasons to start repaying private loans or unsubsidized federal loans immediately.

You earn interest on the balance every day, even when you are in school. This means that you will pay the principal balance, interest, and possibly interest on that interest if you don’t start paying off your student loan sooner.

Paying off some of that interest while you’re still in college will also help keep your overall loan balance manageable. Advance payments made during college can also be as low as $ 25. In addition, it will give you some relief when it comes to paying off your student loan in full after graduation.

Whether or not you are paying off student loans while in school, make sure you are your own advocate and understand what you are committing to when it comes to paying off private student loans before signing your documents.

How to Extend Your Student Loan Grace Period

On the other hand, you may be able to Extend your grace period by requesting a postponement or forbearance if you can’t pay your student loan repayments after leaving school.

If you’re going back to school, have limited income, or are enrolled in a certification class or internship, check with your lender to see if the company offers deferral or forbearance options.

Keep in mind that interest can still accrue even when you defer private student loan payments. So do the math and make sure that deferral is the best option financially for you.

If your goal is to save money on interest and pay off your student loans as quickly as possible, making extra payments is the way to go.

Rebecca Safier and Sage Evans contributed to this report.